Money website says BUY NOW!

fc123

I recall selling in Autumn 2005. There was meant to be a crash in Summer 2005. I hadn't discovered The Oracle back then (ie; this forum) and we moved, the sale fell through as he tried a sneaky gazunder then vanished to Pakistan...never to be seen again....so we left it.

I recall the EA saying...oh no....take the gazunder offer as your house will sell for even less next year....the crash has started...she sold her own place in August and went into rental at the same time....she was also mum of one of my sons acquaintance, so we trusted her a tiny, tiny bit.

Anyway......we just left it and son lived in houes then we rented her out...seemed simpler at the time.


I then couldn't work out why The Crash of 2005 didn't happen.....came here and worked out it was partly due to NR throwing mortgages at anyone with a pulse plus sentiment (from Kirsty and Phil?)...so that explained the bubble carrying on. Well..AIUI..

So, I read in yesterdays Times this

City bankers confident of big bonuses have descended on London estate agents hoping to buy multi-million-pound homes, boosting demand for mortgages. Northern Rock, which needs to more than double its lending from £4 billion in 2009 to £9 billion next year to achieve government targets, hopes to meet the demand.
It has cut rates five times in the past fortnight alone and offers comparatively generous terms to borrowers who want cash bonuses taken into account

OK they are going for the high earners but...it's the 'Target' thingy that bothers me...Govt Targets can distort behaviour...so...that is why I feel now is the bottom as high prices are going to be propped up by any which way.


The only other thing is inflation...if it kicks off, then that is what will bring down values ..but not the current ticket price

Thrugelmir

fc123 wrote: »

OK they are going for the high earners but...it's the 'Target' thingy that bothers me...Govt Targets can distort behaviour...so...that is why I feel now is the bottom as high prices are going to be propped up by any which way.


The only other thing is inflation...if it kicks off, then that is what will bring down values ..but not the current ticket price

Even NR needs to lend money in order to cover its operational overheads and attempt to recoup its bad debts. Otherwise it will continue to suck in taxpayers money.

Remember its being lined up for a sale. The profitable part anyway.

£9 billion isn't a huge amount of money. A lot will be remortgaging from other lenders not new money into the market.

fc123

Thrugelmir wrote: »

Even NR needs to lend money in order to cover its operational overheads and attempt to recoup its bad debts. Otherwise it will continue to suck in taxpayers money.

Remember its being lined up for a sale. The profitable part anyway.

£9 billion isn't a huge amount of money. A lot will be remortgaging from other lenders not new money into the market.

Sounded a lot to me...but all these billions bandied about....I get confused.:o

I just have this feeling that the drops have stopped now in some areas...but took a good few years during the 90's to go down 25odd%.

bo_drinker

As I said before you now have to spend money before a board can be put in the ground ie the hips nonsense. People don't like spending money and certainly don't like risks like "what if house doesn't sell before the search part of the hips runs out" they don't like it. If hips wasn't a factor they would have dropped some more(still time) as it is stocks have been kept low and prices have steadied up (for now) Also a lot of what has been stagnant has not sold because of issues and priced too high. Gordy didn't plan it , it just happened like that, the whole thing is teetering on very thin ice it may go t1ts up it may not, nobody knows. The other thing is the election is coming and people will always wind their necks in before an election, especially with an impending change of Gov't.

chucky

Thrugelmir wrote: »

£9 billion isn't a huge amount of money. A lot will be remortgaging from other lenders not new money into the market.

£9 billion isn't a lot of money!?

that would be 60,000 new mortgages which is roughly 10% of the new purchases of annual property transactions... :rolleyes:

chucknorris

michaels wrote: »

And you are locked in and can't remortgage after 2 years?

I never went for these 2-3 year deals with headline catching low rates. I ALWAYS went for a decent tracker which you know is good value over time. Brokers always used to try and steer me towards these deals saying don't worry just remortgage when the discount ends. They never had an answer though when I replied that I had modelled it on a spreadsheet and found trackers were much cheaper due to the fees (borker's fees, mortgage arrangement fees, valuation fees and the solicitor's fees).

Brokers have a vested interest in these products as they will earn another fee when the discount period ends.

Thrugelmir

chucky wrote: »

that would be 60,000 new mortgages which is roughly 10% of the new purchases of annual property transactions... :rolleyes:

Would that be the current far lower volume of annual property transactions?

Standard Life Bank is being swalllowed up by Barclays. So the mortgage market continues to contract in terms of the number of lenders.

purch

"It's better not to have a mortgage at all".

Yep....then you can be totally impartial in these discussions/arguments/fights

chucky

Thrugelmir wrote: »

Would that be the current far lower volume of annual property transactions?

Standard Life Bank is being swalllowed up by Barclays. So the mortgage market continues to contract in terms of the number of lenders.

regardless if it was the lower volume of transactions it is still a large amount of transactions however period in time you present it

sabretoothtigger

mbga9pgf wrote: »

+2.19 is still hideously expensive historically. Great when rates are 0.5%, not so great when rates head up to past 5%, even if its in 10 years time.... Anyone hoping for bumper pay rises over the next decade are simply delluding themselves.

Wont take 10 years to get back to 5% base rates. It didnt take that long to drop from 5% and theres no good reason why it would be slower to rise back up.


Now is only a good time to buy if people fix the rate for 5 or 10 years because of that premium in the SVR theres less disadvantage to being fixed long term comparatively

Then when rates come back up any loss of value in the house will be offset by cheaper loan repayments.
It should break even long term and you get to own your house, I dont see a boom happening

The base rate has to come back up because when the government stops buying their own debt with printed money the common market will demand higher returns on their money lent.
We borrow from the world so eventually it wont be government who decide the cost of debt


The fool are correct because the worst thing people could do is save money (thats being printed) at the lowest interest rates ever. In terms of risk return there isnt a better bargain then buying a house you live in while costs can be fixed so low.



In terms of cost, interest paid on a loan far out weighs the actual cost of the house over 25 years. To ignore that or even argue the opposite would be foolish! :money: